President Obama likes to taunt Republicans by saying that they hate ObamaCare but don't have a plan to replace it.
That's never been true, but it's even less true now that the GOP has come out with a comprehensive plan to reform health care known as A Better Way, Our Vision for a Confident America.
Writing in the Weekly Standard, Jeffrey Anderson argues that the Republican plan is not only a big step in the right direction but that it would also "fix what the federal government had already broken even before the law was passed and made things so much worse."
Here are some highlights of Anderson's must-read article:
The proposal pairs an Obamacare alternative with Medicaid reforms and the crucial Medicare reforms (amounting to a kind of "Medicare Advantage Plus") that Speaker Paul Ryan and House Republicans have long championed. As Ryan put it after the proposal's release, "The way I see it, if we don't like the direction the country is going in—and we do not—then we have an obligation to offer an alternative….And that's what this is." He called the plan not merely "a difference is policy" but "a difference in philosophy."
Like the Obamacare alternatives advanced by the 2017 Project, the Hudson Institute, Ed Gillespie, Tom Price, and Scott Walker, the House GOP plan would finally fix the tax inequality in health care—which favors job-based insurance over individually purchased insurance—by offering a simple, refundable, non-income-based tax credit to those who buy health insurance on their own. (Those who don't use their whole tax credit could put their savings in a health saving account.) Why should someone who has to buy health insurance on his own not get a tax break while his next-door-neighbor, who has job-based insurance, gets a tax break? Fixing this longstanding tax inequity, combined with repealing Obamacare, would allow the individual market—finally—to begin flourishing.
Meanwhile, the GOP plan wisely wouldn't touch the tax treatment of the typical American's job-based insurance—that wouldn't change one iota. At the same time, however, the proposal would close the tax loophole on high-end insurance—which says the more you spend (on insurance), the more you save (in taxes)—without resorting to a new, clunky, punitive tax like Obamacare does with its "Cadillac tax." The GOP proposal would merely cap the existing tax exclusion for job-based insurance, at a level well above the cost of the typical American's insurance plan, and let people get the whole tax break up to that amount.
The CBO estimates that Obamacare has upped the number of people with private insurance by a paltry 8 million (2.5 percent of U.S. population). Anderson says that the GOP plan would result in as many and probably more people buying private insurance.
Anderson says that the GOP plan would also provide help for people with pre-existing conditions but do it in a way that does not undermine the concept of insurance. The GOP plan is designed to lower premiums, decentralize the system by restoring decision-making to patients, and lower tax burdens.
The future of this plan is in the hands of the next president, who will of course have veto power.